The 2013 Autumn Statement: No Time To Be 21

East of the M60’s verdict on this year’s autumn statement

The start of this week saw George Osborne stating that the Welfare State as we know it today is ‘unaffordable’. Contrary to his statement in The Daily Telegraph, the cheque book is well and truly open for the Corporate Welfare State. This was proven today as non-renewable energy companies were given tax breaks, along with a further £1billion worth of public sector cuts per annum.

The hardest hit group from this year’s statement would be persons born in and after 1990. Their retirement age is likely to be 70 years. Employees under 21 years of age will no longer need to pay National Insurance contributions, though this isn’t due to take effect till April 2015.

Fuel duty will stay frozen with next year’s rise cancelled, with average rail fares flat in ‘real terms’. Local authorities will be encourage to sell off their most expensive housing stock. Business rates are set to be capped with exemption for the smallest of businesses.

Besides tax breaks for fracking companies, and a new nuclear power station in Wylfa, Anglesey, there was little else other than the regurgitation of press releases and programmes from previous statements.

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Retirement Age:

The ConDems are about to embark on a pensions robbery which is set to dwarf Robert Maxwell’s mismanagement of the Mirror Group Newspapers’ pension fund. If you were born on the year of, and after Margaret Thatcher’s resignation (November 1990), there’s every chance you may be less able to see your State Pension. Or never get to retire at all through premature death.

By the 2050s, it is expected that the retirement age would reach 70, rising from 69 in the 2040s, and 68 in the 2030s. It is claimed that increased life expectancy is behind these changes. However, it fails to recognise one thing: how the nature of one’s vocation should affect their retirement age. Do we really want firefighters to work beyond 65, or footballers to play in the Premier League till their fifties? Do we expect plasterers to work in their seventies? As well as their weasel words of longevity, the changes make no allowances for each person’s background. Long spells of unemployment and being born in a deprived area should be taken into account. Not everybody’s able to afford their five a day, nor have the luxury of a desirable residence in London or South East England.

Given that State Pensions are funded by means of National Insurance contributions, Her Majesty’s Government is set to profit from your contributions if you die early. This will have a profound effect on people in deprived areas (including our area east of the M60 motorway), who may never retirement. Unless the 2012 Health and Social Care Bill is repealed, a privatised NHS will exacerbate this owing to a greater postcode lottery and one’s inability to pay if charges are introduced in your local doctors’ surgery.

Employment:

Apart from the plans to reduce National Insurance contributions to zero for under-21s, and a cut in business rates, there is nothing of real substance to encourage people to return to work. These reforms could also give carte blanche for unscrupulous employers to take on under-21s in sweatshops (who already attract lower Social Security and National Minimum Wage rates). Used properly, the latter incentive could be good for High Street businesses, particularly local retailers with established custom as well as business startups. For places like Stalybridge and Uppermill, a cut in business rates could be good news for local shops.

It is also proposed that 16 to 17 year olds would be supported in finding apprenticeships or traineeships in their local Jobcentre Plus office. Since Unemployment Benefit for 16 – 17 year olds was abolished in 1988, persons within that age bracket have had to answer to their local Careers’ Centre. In recent years, this has transmogrified into Training and Enterprise Council [TECs] provision, Connexions and the National Careers’ Service. Expect to see the National Careers’ Service merged with local Jobcentre Plus offices in the next five years.

For 18 – 21 year olds, NEETs lacking basic English and Mathematics skills will be required to brush up their skills immediately after claiming Jobseekers’ Allowance or Universal Credit.If in six months time they are still unemployed nor in training, they will be required to start a traineeship, work for free, or participate in a community work placement.  Noncompliance of the above programmes would result in sanctions. Though this sounds like the components of Tony Blair’s New Deal programme, there is no option for young people to consider full time paid work. An option which was available on the now abolished Future Jobs Fund.

Housing:

No prizes for guessing Gideon’s way: the continuance of his Help To Buy scheme. Again, the Conservative policy of mass home ownership is inherent with Help To Buy and the privatisation of local authority housing stock. For what remains of Greater Manchester’s directly owned municipal stock, some sort of Equity Release scheme will be used to sell off its most expensive housing. In return this would fund more housing, probably with greater population densities and smaller rooms. What’s missing in Osborne’s speech is any reference to new housing stock being in either the ALMO or private sector. I suspect the latter and a nice bit of gerrymandering for good measure.

Throughout our area east of the M60 motorway, the bulk of our social housing stock is owned by arms-length management organisations like New Charter Housing Trust, or by cooperatives. In the last twenty years, some parts of our area’s housing estates have already been sold to private contractors. In other words, a continuation of existing practice. Though Help To Buy has created a fillup in the housing market, its effects haven’t been felt in Northern England. In our area east of the M60 motorway, housing prices have remained static or fallen since May 2010.

Energy:

When is a cut in your fuel bills not a cut? When it is still an increase on your previous year’s bills. Labour has stated that the average fuel bill has risen £120 in the last year. Though Gideon’s £70 cut is intended to seen as such, it is still an increase on last year – £50 instead of £120. The effect on the average household is likely to be minimal, plus residents on prepaid meters will continue to pay through the nose.

IGas and Cuadrilla are likely to see the biggest cut in their fuel bills. Tax breaks for energy companies prospecting for shale gas, or building nuclear power stations will see a tax cut from 62p to 31p in the pound. A new nuclear power station on Wylfa is set to built with the cooperation of Hitachi. Commentators thinking the Conservative-led Coalition Government may assume they’ve lost interest in renewable energy. To some extent yes, apart from a £25billion plan to build offshore wind turbines. This NIMBY-friendly approach will funded by a deal with the Association of British Insurers.

Education:

All schoolchildren are set to benefit from free school meals in their formative years of compulsory education. There will be continued funding for Free Schools and Academies, so expect more ‘bog standard’ comprehensive and primary schools to take the latter route in the next five years.

Transport:

Fuel duty is set to be frozen with next April’s rise cancelled, which could be good news for motorists. ‘Average rail fares’ (or rather, walk-on fares and season tickets) are set to rise in line with inflation. Expect to see the usual groans at the start of January though, and above inflation price rises from the franchisees on advance purchase tickets.

Departmental Budgets:

£3billion will be cut from government departments in the next three years. Schools, the NHS and security services are exempt. This is in addition to existing cutbacks made by local authorities between now and 2018.

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404 Recovery Not Found: East of the M60 Verdict

What have learned from today’s Autumn Statement? Firstly, a great many of us would have to work till 70. Secondly, greater tax incentives for dirty energy sources. Thirdly, apart from a new nuclear power station in Anglesey, precious little infrastructural investment besides the continuance of existing projects like HS2, Crossrail extensions and The Northern Hub. There doesn’t seem to be a coherent strategy for full employment – most importantly well paid full employment. Nor a strategy to expand the economy north of Watford. Real investment is still virtually nil, unless you count groping around shale deposits of the Fylde Coast as ‘investment’.

Instead of raising the retirement age, we should looking at pegging it to 65, and working towards an EU Member State standard retirement age. Where are today’s teens and twenty-somethings going to find an extra twenty years worth of full time work from if employers are reluctant to hire fifty year olds in the 2030s? Will they, thanks to a privatised NHS even see 70 years of age? Will a North West England polluted by the continuance of fracking co-conspire?

The United Kingdom is surrounded by wind and has a temperate enough climate to permit wind and solar energy. Plus we’re surrounded by enough beautiful countryside which could be raped by the continuance of dirty energy sources. Fracking would disrupt the peace and devalue house prices, not only due to the traffic noise, degradation of its surroundings but also earth tremors. The tax cut would give prospectors carte blanche to ruin Singleton and Barton Moss, possibly forever.

Whilst we’re looking at increasing the retirement age, why on Earth have we continued austerity measures till 2018? Obviously, it is an ideological way of shrinking the state to Somalian levels. Yet, it is foolhardy to not allow for an increase in retirement age without public sector investment in attracting new businesses and a policy of full employment outside London and South East England. Not only to accommodate the twenty-somethings likely to get their pension at 70, but also to reduce the North-South Divide. By this, I mean sustainable full time employment – paid a Living Wage rather than the National Minimum Wage – not workfare type programmes. It’s pretty obvious as to where the income for regenerating our areas could come from – direct taxation.

From secure work, they could afford their own homes, but Help To Buy is pushing up prices beyond the reach of some first time buyers. It is from secure work they can heat and eat as well as pay the mortgage. Plus, their town centres may prosper thanks to increased disposable income.

But, the continuance of austerity is going to stymie any prosperity for Mr or Ms Average. Between now and 2018, there will be more foodbanks, zero-hour contracts, ‘heat or eat’ dilemmas and all-round insecurity. In Blackpool and Salford, maybe the odd fracking fuelled earthquake. Even the freeze in fuel duty, bogus real terms freeze in rail fares and derisory fuel bill discount would be useless. The cut in business rates to retailers may well be of little help if wages continue to fall and affect disposable incomes.

For most of us, more tough times, brought to you by Messrs Osborne and Alexander at 11am today. As The Adverts’ song from 1978 states, this is ‘no time to be 21’.

S.V., 05 December 2013.

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